Thailand Investment Update – Additional Exemption of Foreign Business License 2019

The Foreign Business Act (so-call “FBA”) was first enacted in 1999, in which clarifying what the term “foreigner” means in Thailand and explaining the activities that foreigners are allowed to conduct. Simultaneously, FBA also describes restrictions imposed only on foreigners as well – these restrictions are separated into three lists with their main purposes to protect national security and provide advantages to Thai nationals.

Recently in June 2019, the FBA was updated, and its new version added five specific types of service businesses under the Ministerial Regulation prescribing Service Business Which Do Not Require a Foreign Business License (No 4.) B.E. 2562 (2019). This would mean those five service businesses would no longer need to apply for a foreign business license (so-called “FBL”) to operate.

Additional List of Exemption Business Activities

  1. Provide loans to its affiliates and subsidiaries (*);
  2. Provide rental services with utilities to affiliates and subsidiaries; and
  3. Provide advisory services, specifically management, marketing, human resources, and information technology to affiliates and subsidiaries.

Note: (*) Affiliates and subsidiaries shall be related in one of the following ways;

  1. Shareholders/partners which are more than half of the total shareholders/partners of a juristic person are also the same shareholders/partners of another juristic person.
  2. Shareholder(s)/partner(s) holding shares or being a partner(s) ranging from 25% of the capital of a juristic person hold(s) shares or is/are a partner ranging from 25% of the capital of another juristic person.
  3. A juristic person holds shares or is a partner ranging from 25% of the capital of another juristic person.
  4. The director/partner having the managing power more than ½ of the total power in a juristic person is also the same director/partner of another juristic person. 

Contributed by:

Bunnasomboon Chaiparinya Aaron
Director / Associate
Email: aaron@jtjb.com